Iowa revamps its child support guidelines--sort of
Posted on 08/15/2017 at 12:00 AM by Regan Wilson
Since 2009, Iowa has used the Pure Income Shares Model approach to determine what amount of support is sufficient for parents who have separated. This model combines each parent’s income, compares it to a schedule that sets support on the number of children to whom support is owed, and takes into account a few other variables such as the cost of healthcare and who is claiming the children’s income tax dependency exemptions. This formulaic approach may sound complicated, but thanks to computer software, attorneys that are otherwise not numbers-oriented are able to plug in a few variables and will be told within seconds what constitutes a fair amount of child support. The problem is that this model cannot account for real-world factors, such as the soaring cost of diapers, formula, and childcare. Because of this disparity, the Iowa Supreme Court created a Child Support Guidelines Committee, which reviews Iowa’s Child Support Guidelines every four years. On July 20, 2017, the Iowa Supreme Court approved the Committee’s recommendations.
Effective January 1, 2018, several changes will go into effect. The first change concerns healthcare costs. Typically, under the Iowa Child Support Guidelines, whichever parent is covering the child’s healthcare gets a credit for the cost of covering the child(ren)’s healthcare. Under the current Guidelines, the court’s formula for determining the child’s cost has been “family minus single” to ensure that the party providing the healthcare does not get a large deduction for non-party family members. The problem with this approach is that often it was not a sufficient formula to rule out the effect of the other party subsidizing the cost of non-party children and new spouses. To resolve this issue, the Court modified the Guidelines and created a formula that I dare not repeat here for fear of making heads spin. Let’s just say that in its July 20, 2017 Order, it was not without reason that the Iowa Supreme Court also adopted the Committee’s recommendation to create an educational video for the public on how the guidelines operate. However, I can report with confidence that the new formula further ensures that the parent providing healthcare gets a deduction only for the children of the other party.
The second change concerning health insurance is that it addresses the effect of parents who cover children with Hawk-I. Hawk-I, or Healthy and Well Kids in Iowa, provides health insurance for working parents that cannot afford health coverage. Strangely enough, under the Guidelines, Hawk-I is not characterized as private coverage and is not characterized as state-funded coverage. Because of this anomaly, the Guidelines would ordinarily require the non-custodial parent to pay a cash medical support obligation that is set upon his or her income. Even though the monthly premiums under Hawk-I never exceed $40 a month, the cash medical support obligation would often be higher, which would result in the custodial parent pocketing the excess support. To rectify this problem, the Committee modified the Guidelines to require the Court to either order a cash medical support obligation or the cost of the monthly Hawk-I premium, whichever amount is less.
The next change concerns spousal support. Under the current Guidelines, the Court’s analysis of income is only effected by past spousal support obligations. So, if a party was previously divorced the Court would deduct the spousal support from that party’s income when configuring a party’s net income. Under the current Guidelines, however, the Court ignores any spousal support that is ordered in the current action. Effectively, by ignoring any spousal support obligation ordered in the present preceding the Court has artificial income amounts in which to set child support. Fortunately, the Court adopted the Committee’s recommendations to deduct any currently-ordered spousal support obligation from the payor’s income and add it to the payee’s income before calculating child support.
The last significant change worth mentioning concerns childcare expenses. Often, custodial parents are strapped with a child support obligation that does not even come close to covering the costs of today’s rising childcare costs. Many parents are paying $300 per week in childcare ($1,300 per month) and could be receiving a monthly child support that is less than $1,300 a month. Not only is the custodial parent wholly responsible for these daycare costs, but they remain on the hook for the child’s other routine costs, such as clothing, school lunches, school supplies, registration fees, extra-curricular costs, etc. The Committee attempted to resolve this increasingly difficult issue by creating a separate variance rule. Under the current Guidelines, Iowa courts can only deviate or vary from the guidelines if it makes written findings of fact that substantial injustice would result to the payor, payee or children. In short, it has traditionally been an uphill battle to persuade the Court to deviate upwards for childcare costs. The Committee, recognizing that childcare often falls to the wayside, created a separate variance rule that emphasizes the need for the Court to consider childcare costs as a reason to vary from the Guidelines.
This year, the Committee made a valiant effort to revamp the Guidelines, but it will continue to be an uphill battle for Iowa Courts to address the myriad of nuances in each family’s need for financial support. If you have any questions related to the new child support guidelines or you think the court should take another look at your child support obligation based upon the new guidelines, feel free to contact Regan Wilson.
The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.
- Regan Wilson
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